By CHRISTINE HAINES
The Belle Vernon Area School District will reduce its debt by more than $500,000 by taking advantage of a favorable bond market.
The school board had initially anticipated saving $302,829 when the refinancing was discussed in February and had still intended to go through with the deal with the savings dropped to $254,039 in March. The board held off, finally approving the refinancing at its April 27 meeting with an anticipated savings of $450,000.
“The bonds were sold two days after and the district ended up saving $512,555, or 7.08%,” said business manager Crystal Clark. “The market was favorable for us.”
The district restructured a Tax Exempt Lease Purchase issued in 2016 to fund the Opterra Energy Services guaranteed energy performance contract of $7.7 million. The lease was for 15 years plus 12 months construction.
By working with PFM Advisors and the investment bank Piper Sandler, the district was able to issue a bond instead of refinancing the TELP without extending the original maturity date, Clark said.
Clark was also able to request a pre-default rating for pricing the bonds in exchange for a 15-day early payment, saving the district additional money. Clark said the pre-default rating gave the district a temporary improvement in its bond rating, good for that bond only. The district’s Moody credit rating has not changed.
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